Property & Casualty News July 2012

The following is a brief review of selected items that may be of current interest to First Consulting & Administration, Inc. clients and friends.  Please feel free to copy it for distribution to your staff.  Contact us for more details about any item.  We welcome your comments and suggestions on this letter.  Please call our office.


Louisiana revised requirements regarding proof of insurance to allow for the use of mobile electronic devices as a method of providing proof of insurance.  Under specified circumstances, a paper copy of proof of insurance may be required.     House Bill 1130

New Jersey issued a bulletin to remind insurers and producers that $250,000 is the default coverage level option that must be offered to all applicants and existing insureds with respect to PIP benefits for standard private passenger automobile insurance.  The bulletin notes that this includes default coverage level selections on websites and that the applicant or policyholder may affirmatively select lower limits; however the default coverage level option must be $250,000 and the PIP coverage amount cannot be pre-populated with a lower amount.     Bulletin 12-07

Oregon adopted temporary rules to set forth financial, reporting, recordkeeping and other requirements for the regulation of captive insurers.     836-029-0000+

New Jersey amended eligibility requirements for a foreign or alien company to revise seasoning requirements that an applicant for a Certificate of Authority must satisfy.     NJAC 11:1-10.4

Idaho issued a bulletin regarding filing and use requirements for certificates of insurance and discussing new legislation enacted during the 2012 legislative session (reported in the May 2012 edition of this newsletter).     Bulletin No. 12-03

Maryland amended requirements concerning certificates of insurance.  Included is a requirement that certificate of insurance forms be filed for approval, with certain specified exceptions.     Ins. s 19-116

Virginia issued an Administrative Letter asking that insurers instruct their currently appointed agents to review the letter. The letter provides a specific course of action for producers to follow if a consumer demands that a certificate of insurance with false or misleading information be produced.     Administrative Letter 2012-7

Tennessee issued a Memorandum regarding commercial risk policies issued to exempt commercial risk policyholders.  The memorandum publishes a self-certification form, which is required to be submitted annually (at the policy origination date and/or at renewal) to the Division by a commercial risk policyholder to qualify as an ‘exempt commercial risk policyholder.‘  The Memorandum also publishes sample disclaimer language that insurers may use to satisfy a requirement that any application or policy issued to an exempt commercial risk policyholder contain such a disclaimer.     Memorandum 6-29-2012

Colorado issued a bulletin regarding payment of claims resulting from the Fourmile Canyon fire.     Bulletin B.5.28

Alabama issued a bulletin regarding the enactment of the Insurance Fraud Investigation Unit and Crime Prevention Act which becomes effective 8-1-12.   The bulletin asks insurers to "familiarize themselves with this law and to inform their staff and agents of its implications," and provides a link to the Act.     Bulletin No. 2012-03

Louisiana established the Sledge Jeansonne Louisiana Insurance Fraud Prevention Act, named in honor of Kim Sledge and Rhett Jeansonne who were murdered while performing their duties as insurance fraud investigators for the DOI.     Senate Bill 765

Maryland revised provisions concerning the reporting of suspected insurance fraud to provide that a person is not subject to civil liability by virtue of reporting suspected insurance fraud, or furnishing or receiving information relating to suspected, anticipated, or completed fraudulent insurance acts, if the information was furnished to or received from specified persons or entities and the person that furnished or received the information acted in good faith.     Ins. s 27-802

Connecticut enacted legislation concerning coverage for perishable food donated to temporary emergency shelters during a state of emergency.  An insurer that provides coverage for the spoilage of perishable food must provide coverage to the same extent for perishable food that is donated to a temporary emergency shelter operated or supervised by a municipality or the state during a state of emergency.     Uncodified HB 5143 s 1 (2012)

Connecticut amended provisions applicable to homeowners coverage to permit an insurer to impose hurricane deductibles in lieu of an overall policy deductible during certain specified periods of time.     38a-316a

Delaware issued a bulletin regarding the 2012 Homeowners' Insurance Rate Survey.  The bulletin states that insurance companies with more than .01 percent market share in the homeowner multiple peril line are required to complete the annual rate survey due on 8-1-12.     Domestic/Foreign Insurers Bulletin No. 50

Maryland established a new requirement pertaining to allowable reasons for cancellation or nonrenewal.  Insurers are required to provide written notice to the insured at the time of application or issuance and at each renewal stating that, in addition to the other allowable reasons for cancellation or refusal to renew, the insurer may cancel or not renew based on the number of claims made within the preceding 3-year period, and based on the number of weather-related claims under specified circumstances.     Ins. s 19-214

Louisiana revised certain requirements applicable to surcharges payable to the patient's compensation fund.  After malpractice liability premiums are received by the insurer, agent of the insurer, risk manager, or surplus lines agent from the health care provider, surcharges are to be paid to the fund within 30 days (previously 45 days).     R.S. 40:1299.44

Michigan issued a bulletin advising insurers that electronic reporting procedures are being implemented for submission of required medical malpractice claim information.     Bulletin 2012-12-INS

Pennsylvania amended insurance requirements applicable to dentists and describes types of acceptable Professional Liability coverage they must have.     SB 388

Colorado amended its regulations pertaining to timelines for Division inquiries and document requests including, but not limited to, document and information requests during market conduct and financial examinations, investigations of complaints, and any other formal or informal investigation or examination.     Regulation 3 CCR 702 Reg. 1-1-8

Colorado issued a bulletin to provide guidance to insurers, carriers, producers, and consumers about the use of prepaid debit or stored value cards for the payment of insurance claims, including but not limited to claims for additional living expenses, under property, casualty, life, health, or disability insurance.     Bulletin B-6.3

Montana issued a Memorandum advising that refusal to issue, refusal to renew, or cancellation or limitation of the amount of insurance based on the threat of wildfires, and which involves property that does not have a substantially increased risk of loss due to wildfires, will be evaluated as a potential violation of law.     Memorandum 6-29-2012

Oklahoma revised provisions regarding requests for information from the Commissioner's office.  The street address for submitting written requests is revised, and references pertaining to requests made by personal appearance and by telephone are deleted.     365: 1-1-4


Maryland amended requirements applicable to renewal premium increase notices issued for policies of commercial insurance and workers’ compensation insurance to provide that certain requirements do not apply if the renewal premium is greater than $1,000 and the increase over the expiring policy premium is the lesser of 3% or $300.     Ins. s 27-608

Maryland amended certain requirements pertaining to portable electronics insurance.  Among the changes is a provision permitting electronic notice of termination or change in the terms and conditions of a policy.     House Bill 1093

Rhode Island enacted legislation concerning the licensing and authority of vendors, required consumer disclosures, and procedures for termination of coverage.     House Bill 7478

Hawaii issued a Memorandum describing new continuing education requirements for personal lines producers.     Memorandum 2012-3LIC

Nebraska posted an announcement on the Department of Insurance website regarding launch of new back-office software, State Based Systems (SBS), on July 16th.  Although companies will receive new license numbers, the change primarily impacts producers (either individual or business entity) as they will be assigned new license numbers, license printing, CE transcripts in real time and more.     Notice regarding SBS

Oklahoma amended certain producer licensing continuing education requirements.  Included in the changes is removal of the requirement that CE credit hours must be in the lines in which the producer is licensed.     Rule 365:25-3-1

Oregon adopted temporary rules requiring electronic submission of license applications and continuing education materials.  All fingerprints are to be submitted electronically from the exam vendor testing facilities, continuing education providers will be required to report course completion information electronically via instructions from the division, and non-resident applicants must supply background information electronically.     Temporary Rule 836-071-0110+

Rhode Island enacted legislation concerning modification or revocation of an insurance producer's contract.  Included are provisions prohibiting specific actions by property and casualty insurers, and pertaining to renewal of expiring policies of an insurance producer who has received notification of cancellation.     27-2.4-20 and 27-2.4-20.1

Utah issued a bulletin clarifying requirements for agency and consultant licenses.     Bulletin 2012-3

Texas issued a bulletin regarding the call for workers' compensation and employers' liability rate filings for the 2012 public rate hearing.  The requirement applies to all insurance companies subject to Texas Insurance Code, Chapter 2053 and §2051.002 that write workers' compensation and employers' liability insurance on a direct basis in Texas.  The rate filings are due by August 15, 2012, and the bulletin includes special instructions for companies that submitted a rate filing on or after April 1, 2012.     Commissioner's Bulletin B-0015-12

Implementing Product Changes Quickly

Insurance companies are nearing a frantic pace in trying to get form and rate changes implemented ahead of their competitors. Almost every line of business is active in speed to market initiatives:

Personal Lines – rate increases and coverage changes

Commercial lines – niche markets and some hardening of the market

Title insurance – competitive in a smaller market with increased regulatory pressure

First Consulting can assist you with drafting policy changes and policy filing services. We can also assist you with your research needs of applicable laws and regulations related to forms and any area of compliance.

Contact me today to see how First Consulting can help.

Joe Bieniek

 The Objective is Clear

Like you, many insurance company and health plan Compliance leaders are struggling to implement risk management programs. You are probably aware of the New York published Circular Letter #14 (12/19/11). The circular letter sets out guidance to meet Enterprise Risk Management (ERM) standards. However, you may not be aware that NY regulatory examiners are now emphasizing the need for companies to get in step with the Circular Letter. Whether in NY or not, the guidance laid out in this letter may be helpful in determining your company’s best ERM strategy.

In either case, we can help.

We know how to get started, and where to begin. We help you establish strategic action plans for (1) Leadership and (2) Operations. Then we support your implementation, measurement and reinforcement of the changes needed.

The objective is clear. We can help coach your company to reach the goal.

 C. J. Rathbun


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